1031 Exchange

>> Craig Martin Knows 1031

If you currently own real estate that you are selling and want to avoid paying capital gains tax on your profits, we can help.  At Craig Martin, we are familiar with 1031 Exchange rules as we work with 1031 Exchange investors throughout the country – helping them find the right properties in the right locations and getting them closed in time to meet the Exchange requirements.  We provide our clients with professionally managed investments – both residential and small commercial – that are hand selected, income producing, equity building, low maintenance investments located in areas of the country that are undervalued and primed for appreciation.  At Craig Martin, 1031 Exchange clients get top priority.

To get started, click here

>> What is a 1031 Exchange?

Under Internal Revenue Code (IRC) Section 1031, a real property owner can sell certain property and then reallocate the proceeds in ownership of like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 Exchange can offer significant tax advantages to real estate buyers.

>> Who should consisder a 1031 Exchange?

If you have real property that will cause you to experience a gain upon sale (generally property that has been substantially depreciated for tax purposes and/or has appreciated in fair market value), then you are exactly the person who should consider a 1031 Exchange.

>> What are the general 1031 Exchange rules?

The real property you sell and the real property you buy must both be held for productive use in a trade or business or for investment purposes, and must be like-kind.

The proceeds from the sale must go through the hands of a qualified intermediary and not through your hands or the hands of one of your agents, or else all the proceeds will become taxable.

All the cash proceeds from the original sale must be reallocated to the replacement property—any cash proceeds that you retain will be taxable.

The replacement property must be subject to an equal level or greater level of debt than the relinquished property or the buyer will either have to pay taxes on the amount of the decrease or have to put in additional cash funds to offset the lower level of debt in the replacement property.